The Price Elasticity of Demand for Ground Beef Has Been

question 195

Multiple Choice

The price elasticity of demand for ground beef has been estimated to be -1.0.If mad cow disease strikes the United States and a large percentage of the cattle are removed from the market, how will that affect total expenditures on hamburger, all other things unchanged?

• A) total expenditures will remain unchanged
• B) total expenditures will fall by more than 1 percent
• C) demand will fall by 1 percent, but total expenditures will fall by less than 1 percent
• D) total expenditures will rise

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